If you are in the business of cash loans or on the verge of venturing into the business, know that the business is not protected by law and, as such, can run the risk of being defeated before the court of law. Further, the business is new to the country and owners abuse the business as they over charge the stranded poor people.
Deputy court president, Daniel Setshwane of Gaborone West Customary Court, told Lorato Sebifelo, 21, that her cash loan business was not in accordance with the laws of Botswana as there is no law on Botswana books that recognizes civil suits arising from such micro-lenders.
“Cases such as this one give me a head-ache. Where do Batswana learn about this business? Are these businesses registered ?”, he asked.
To this end, Sebifelo produced the certificate and told the court that sometime last year in July, her friend, Cathrine Thekiso, 25, borrowed a sum of P300 from her on condition that the same would be repaid with a P60 interest rate.
The defendant managed to pay P260 this year and during the time she did not pay, the money accrued on a P60 rate per month, she said.
She further told the court that the defendant owes her the sum of P910 being the money accrued from the months the defendant failed to pay.
The defendant, on the other hand, disputed the matter and told the court that they never discussed the issue on interest rates, adding that the complainant lent her the money because they were friends.
Thesis further told the court that she owed the complainant P40 being the outstanding money from the initial P300.
Giving judgment Kgosi Setshwane said the issue was complicated as there was no law to adhere to saying cash loans were unscrupulously aimed at swindling the stranded people by charging exorbitant interest rates which are indiscriminate as everyone charges her/his interest rates.
He said cash loans must be regulated to avoid high interest rates adding the rates were much higher than the government-recognized CEDA rates.
He ruled that the defendant pay P40, 00 within a period of 7 days failure of which her properties would be sold to compensate the complainant.
Further, he advised the complainant to try other avenues especially the subordinate courts, as “they are learned and professionally able to deal with complicated issues like this one